America's shortfall on trade in goods widens more than expected in August
By Alexander Bueso
Date: Tuesday 29 Sep 2020
(Sharecast News) - America's shortfall on trade in goods with the rest of the world was a bit worse than anticipated.
According to the Department of Commerce, the country's so-called visible trade balance widened at a month-on-month pace of 3.5% in August to reach $82.9bn (consensus: $82.4bn).
Last month's increase was off a higher base after Commerce revised its estimate for July from $79.3bn to $80.5bn.
Imports were 3.1% higher, more than offsetting the 2.8% rise in exports.
"Ex-industrial supplies, the deficit rose to a record $84.1B from $76.1B. Before Covid, the trend was running at about $69B per month, and declining slowly. The Covid shock crushed both exports and imports, and both remain below their prior levels, but the rebound in imports has been bigger," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"Net trade is likely to be a net drag on Q3 GDP growth, probably subtracting more than one percentage point. That will be trivial compared to the surge in domestic spending, which likely will lift growth to 30% or more, thanks to hugely favorable base effects and strong momentum in the early part of the quarter."
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